Flash Report November 2016

The surprise election of Donald Trump dominated market performance in November. Investors with dry powder moved quickly to express their views regarding expected growth and inflation. Expectations of increased infrastructure spending, reduced regulations, and lower taxes proved bullish for stocks and the US dollar while bearish for bonds. Markets also discounted concerns regarding trade policies on the global political economy. Clearly, investors are sorting out the future in an environment of extreme surprise, strong emotion, and uncertainty about policies and policy makers. Overshooting is a distinct possibility.